Andhra Pradesh High Court - Amravati
M/S. Sri Radha Krishna Modern Rice Mill vs The Assistant Commissioner State Taxes on 11 August, 2020
Author: M. Satyanarayana Murthy
Bench: M. Satyanarayana Murthy
THE HON'BLE SRI JUSTICE M. SATYANARAYANA MURTHY
AND
THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI
WRIT PETITION Nos.8754, 8733 AND 8084 OF 2019
AND
WRIT PETITION Nos. 7407, 7546, 7432, 7437, 7427 OF 2020
COMMON ORDER:(Per Hon'ble Sri Justice M. Satyanarayana Murthy) All these writ petitions are filed questioning the proceedings of the Assistant Commissioner (ST), Eluru Circle, Eluru making the petitioners liable to pay tax on job work (custom milling).
For convenience sake, the facts in W.P.No.8754 of 2020 are taken into consideration.
The writ petitioner is the rice millers carrying on rice milling business and registered dealer under the provisions of Goods and Service Tax Act on the rolls of the first respondent under both State and Central Enactments. The State Government through A.P. Civil Services Corporation-second respondent herein, procures paddy from the ryots and gives the same to the rice mills to the second respondent for milling the same to convert into rice and handing over the milled rice to the second respondent for its public distribution. As consideration for milling work, the second respondent pays charges @ Rs.15/- per quintal of paddy milled.
It is contended that, as per the conditions imposed by the second respondent, the rice millers have to supply rice equal to 67% of the paddy given for milling i.e. for every quintal of paddy supplied by the second respondent, the petitioner has to supply 67 MSM,J & LK,J 2 kgs of milled rice to the second respondent. The yield depends upon the quality of the paddy milled and it is not possible to get yield of 67% in all cases. It is submitted that, as per the quality of the paddy supplied by the second respondent, the actual yield being obtained by the petitioner is around 61% to 62% only. Therefore, the balance 5% to 6% i.e. 5 kgs to 6 kgs per quintal has to be provided by the petitioner to the second respondent out of its own stock. Therefore, as compensation/exchange for the same, the second respondent allows the petitioner to retain the broken rice, bran and husk obtained in the course of milling of paddy. The petitioner has sold the said broken rice, bran and husk. Broken rice and husk are exempted from tax and therefore no GST was paid on the same, but the petitioner pays tax on the bran @ 5% on its regular sales.
While the matter stood thus, the first respondent issued show cause notice dated 30.05.2019 proposing to levy GST on the estimated value of husk, broken rice and bran. But the petitioner did not submit any representation to the show cause notice and consequently the impugned assessment order were passed on 24.09.2019 by the first respondent making the petitioner liable to pay the tax amount.
Name of the writ petitioner, writ petition, show cause notice/proceedings of the first respondent and the liability of tax payable by them in all the batch of cases are tabulated hereunder:
MSM,J & LK,J 3 S.No. Writ petition Name of the Proceedings and Tax Liability petitioner date 1 W.P.8754 of M/s. Sri Ref.No.A3/51/2017- Rs.2,56,970/-
2020 Pavan Sai 18 (SGST) dated
Traders 24.09.2019
2 W.P.8733 of M/s. Satya Ref.No.A3/51/2017- Rs.8,39,498/-
2020 Deva Modern 18 (SGST) dated
Rice Mill 24.09.2019
3 W.P.7407 of M/s. Sri Order No.16 dated Rs.3,42,064/-
2020 Radhakrishna 10.01.2019
Modern Rice
Mill
4 W.P.8084 of M/s. Satya Ref.No.A3/51/2017- Rs.8,39,498/-
2020 Deva Modern 18 (SGST) dated
Rice Mill 24.09.2019
5 W.P.No.7546 of M/s. Sri
2020 Venkata Assessment order
Srinivasa dated 12.09.2018 Rs.26,249/-
Modern Rice
Mill
6 W.P.No.7432 of M/s. Sree Ref.No.A3/51/2017- Rs.7,89,137/-
2020 Lakshmi 18 (SGST) dated
Narayana Rice 24.09.2019
Mill
7 W.P.No.7437 of M/s. Sri Order No.17 dated Rs.7,43,676/-
2020 Radha 10.01.2019
Krishna Agro
Foods
8 W.P.No.7427 of M/s. Sree Ref.No.A3/51/2017- Rs.7,89,137/-
2020 Lakshmi 18 (SGST) dated
Narayana Rice 24.09.2019
Mill
Aggrieved by the impugned orders fixing tax liability on the petitioners shown in last column, the present writ petitions are filed on various grounds.
During hearing, this Court raised an objection with regard to maintainability of the writ petition when an appeal is provided under GST Act against the order impugned in the writ petitions. But, the learned counsel for the petitioners contended that the appeals were filed against similar orders and they were dismissed by the Appellate Authority. Therefore, these petitioners approached this Court by filing writ petitions.
MSM,J & LK,J 4 Whereas, the learned Government Pleader for Commercial Tax contended that, when a statutory appeal is permitted under the Act, the petitioners cannot straight-away approach this Court invoking the jurisdiction of this Court under Article 226 of the Constitution of India, and when an efficacious remedy is available, the Courts would not normally entertain a writ petition exercising power of judicial review under Article 226 of the Constitution of India. In similar cases, Division Bench of this Court in W.P.Nos.11819 and 11820 of 2020 dated 21.07.2020 passed order permitting this petitioner to approach the Appellate Authority, while directing the petitioner to file an appeal within ten days from the date of order while restraining the first respondent from taking coercive steps against the petitioner for a period of two weeks and further contended that, this Court cannot take any different view than that of the coordinate bench of this Court and requested to dismiss these writ petitions.
It is an undisputed fact that a remedy of statutory appeal is available against the order passed by the first respondent under the provisions of State G.S.T Act. Instead of preferring an appeal, in terms of the provisions of the Act, the petitioners straight-away approached this Court on the lame execute that similar appeals were dismissed. But, dismissal of appeals by the authorities concerned or by the Courts depends upon the facts of each case and argument advanced by the counsel before the Courts. Mere dismissal of two or three appeals is not a bar to approach the MSM,J & LK,J 5 Appellate Authority when statute provides such appeal. However, in the recent judgment Genpact India Private Limited v. Deputy Commissioner of Income Tax and another1 the Division Bench of the Apex Court held that, when a statutory remedy is available under the statute, the Court would not normally entertain the writ petition against assessment order. The Apex Court finally concluded that, if the submission is accepted, every time the dispute will be required to be taken up in proceedings such as a petition under Article 226 of the Constitution, which normally would not be entertained in case of any disputed questions of fact or concerning factual aspects of the matter. The assessee may thus, not only lose a remedy of having the matter considered on factual facets of the matter but would also stand deprived of regular channels of challenges available to it under the hierarchy of fora available under the Act.
In Commissioner of Income Tax and others v. Chhabil Dass Agarwal2 the Apex Court held as follows:
"Before discussing the fact proposition, we would notice the principle of law as laid down by this Court. It is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist 1 (2019) 311 CTR (SC) 737 2 (2014) 1 SCC 603 MSM,J & LK,J 6 sufficient grounds to invoke the extraordinary jurisdiction under Article 226. (See State of U.P. v.
Mohd. Nooh3, Titaghur Paper Mills Co. Ltd. v. State of Orissa4, Harbanslal Sahnia v. Indian Oil Corpn. Ltd5 and State of H.P. v. Gujarat Ambuja Cement Ltd6) In view of the law declared by the Apex Court, when a statutory remedy is available against the order under challenge in the writ petition, the Court shall not normally entertain petition under Article 226 of the Constitution of India which is purely discretionary in nature.
The Apex Court time and again laid down certain principles as to under what circumstances the Court can exercise its power of judicial review under Article 226 of the Constitution of India and that there is no absolute bar to entertain such writ petitions, more particularly, when the authorities passed an order in violation of principles of natural justice or without considering any law or without affording any opportunities to the parties.
In Maharashtra Chess Association v. Union of India7 the Division Bench of Apex Court was called upon to decide whether the existence of an alternate remedy would create a bar on High Court to exercise writ jurisdiction, it held, "The existence of an alternate remedy, whether adequate or not, does not alter the fundamentally discretionary nature of the High Court's writ jurisdiction and therefore does not create an absolute legal bar on 3 AIR 1958 SC 86 4 (1983) 2 SCC 433 5 (2003) 2 SCC 107 6 (2005) 6 SCC 499 7 Civil Appeal No. 5654 of 2019 @Special Leave Petition (C) No 29040 of 2018 dated 29.07.2019 MSM,J & LK,J 7 the exercise of the writ jurisdiction by a High Court." Explaining that the court added that courts had themselves imposed certain constraints on the exercise of their writ jurisdiction to ensure that the jurisdiction did not become an appellate mechanism for all disputes within a High Court's territorial jurisdiction, the bench said, "The intention behind this self-imposed rule is clear. If High Courts were to exercise their writ jurisdiction so widely as to regularly override statutory appellate procedures, they would themselves become inundated with a vast number of cases to the detriment of the litigants in those cases." This would also defeat the legislature's intention in enacting statutory appeal mechanisms to ensure the speedy disposal of cases. The mere existence of alternate forums where the aggrieved party may secure relief does not create a legal bar on a High Court to exercise its writ jurisdiction. It is a factor to be taken into consideration by the High Court amongst several factors.
In M/s.HCL Infosystems Limited v. State of Rajasthan8, Division Bench of Jaipur considered the Doctrine of exhaustion of remedies which prevents a litigant from seeking remedy or claims or remedies exhausted observed as follows:
"Since remedy of appeals are provided to the assessee under the VAT Act, which are equally efficacious and speedy remedy, especially when after 2003, there is no bar for the High Court to grant appropriate interim order of stay in sales tax revision. In fact, in one of the cases, the Tax Board has decided the matter against the revenue not only on the question of penalty and interest, but 8 W.P.No.491 of 2017 dated 17.09.2019 MSM,J & LK,J 8 also on the question of tax and subsequently the Board has itself made reference to its Larger Bench on the issues raised in these appeals, which is pending. It therefore cannot be said that alternate remedy available under the Act is not effective and efficacious."
The case before Rajasthan High Court is identical to the present facts of the case and in any view of the matter, Rajasthan High Court referred to earlier judgment of Supreme Court in Whirlpool Corporation vs. Registrar of Trade marks, Mumbai & Ors9. Therefore, the petitioners are admittedly entitled to avail statutory remedy of appeals and the disputed questions of fact is also to be considered by the Appellate Authority in the facts of the present cases and as such Writ Courts will not undertake such enquiry while exercising power of judicial review while entertaining writ jurisdiction which is within the realm of appellate authority. More so, failure to exhaust statutory remedies would amount to by-passing statutory remedy and approaching the High Court seeking a discretionary relief under Article 226 of the Constitution of India. On the other hand, the Coordinate Bench of this Court already took a specific view that writ petitions are not maintainable when statutory remedy is available and this Bench cannot take a different view than that of the view taken by the Coordinate Bench of the same Court. Hence, we find that these are not fit cases to exercise power of judicial review under Article 226 of the Constitution of India.
9 (1998) 8 SCC 1 MSM,J & LK,J 9 One of the contentions urged by the learned counsel for the petitioners before this Court is that, similar matters were rejected by the Appellate Authority. But, no copy of the order passed by the Appellate Authority is placed on record for perusal of this Court to accept such contention. Even otherwise, facts may vary from case to case and the officers of the Appellate Authority may change from time to time. Therefore, mere alleged dismissal of similar appeals filed before the Appellate Authority under statute is not a ground to entertain the writ petitions.
In view of the facts and circumstances, all the writ petitions stands disposed of granting liberty to the petitioners to approach the appellate authority by filing appeals. If such appeals are filed in accordance with law within ten (10) days, the appellate authority may examine the same and pass appropriate order. As an interim measure, to enable the petitioners to file appeals, the respondents are restrained from taking any coercive steps against the petitioners for a period of two weeks. There shall be no order as to costs.
Consequently, miscellaneous petitions, if any, pending in these writ petitions shall stand closed.
_________________________________________ JUSTICE M. SATYANARAYANA MURTHY __________________________________ JUSTICE LALITHA KANNEGANTI Date:11.08.2020 SP MSM,J & LK,J 10 THE HON'BLE SRI JUSTICE M. SATYANARAYANA MURTHY AND THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI (pre-delivered judgment in) WRIT PETITION No.8754, 8733, 7407, 8084, 7546, 7432, 7437, 7427 OF 2020 Date: 11.08.2020 SP